World Economic Weekly News

Week ended 27 January 2011

UK

Week in review:

In the UK. GDP data showed the economy contracted by 0.2% in Q4, a little weaker than consensus expectations of a 0.1% contraction, suggesting that the UK could be heading into a technical recession. The underlying detail, however, seemed to suggest an improvement in activity as the quarter progressed perhaps suggesting the UK is already through the worst.

US

Week in review:

Perhaps justifying the Fed’s caution on the economy, US Q4 GDP came in a little below market expectations at 2.8% saar, against consensus of 3%. The underlying details were reasonably weak; with much of the gain driven by inventory accumulation (final sales were only up 0.8%). However, other data remained solid. Durable goods orders were up 3% m/m, the Chicago Fed National Activity Index rose 0.63 points to 0.17 and Kansas City Fed was also strong. Initial jobless claims remained solid at 377k, weakening a tad from last week’s exceptionally strong print. Consumer confidence data was also better, with the University of Michigan survey improving and Bloomberg Consumer Comfort index ticking up slightly.

Eurozone

Week in review:

Eurozone data showed a few signs of stabilisation, with improvements in the manufacturing and services PMI and the IFO firmed by 1.0 to 108.3, and French and German consumer confidence data improved. However, there was weakness in French and Spanish employment data.